The term "lossless data compression" means that all of the information in an input string or message is retained when that information is compressed so as to be represented by a smaller amount of data. Thus, when the compressed data is decoded, the reconstructed message will be identical to the original input message represented by the compressed data.
The present invention is, in essence, a highly efficient system and method for implementing a well known lossless data compression technique, sometimes known as the "Lempel and Ziv noisless universal data compression algorithm". This data compression algorithm is also sometimes called the "history buffer" algorithm.